Archive for June, 2008

Now that the details of the new iPhone are out, the next pieces of news around the iPhone will be regarding the App Store. Several companies have apps confirmed to be coming out, and Zintin will be one of the applications on the iPhone’s App Store this summer but there are as many as hundreds of thousands of people building apps right now. What can we expect in the future, and what is going to be big?

In the last post we mentioned that we spoke with a partner managing the iFund at Kleiner Perkins Caufield and Byers (KPCB). They believe that iPhone apps will be huge, in fact, the opportunity is “on par with or greater than the PC internet.” Chi-Hua Chien, the KPCB partner we spoke with, also said that the number of applications that iFund has received from companies is in the thousands. We would like to share a bit about his thoughts on what apps will be popular.

We were also fortunate enough to see Mike Mace of Mobile Opportunity discuss his recent iPhone user survey. His experience working for Palm and Apple for many years was a great help in digesting the data, and he made some interesting points about iPhone apps.

The iPhone user survey indicates, as expected, that people with iPhones are early adopters, they own a lot of technology products, and they are young. It looks like a majority of iPhone users will be looking to install apps on their iPhones.

Mike Mace and Kleiner’s Chi-Hua Chien agree that good iPhone applications will take advantage of the fact that the phone is very personal, and it is always with you. A while back KPCB put some money in mobile software that uses a user’s location to provide information about nearby restaurants and such. Many companies will be trying to leverage location data to provide personalized services like this. The question is, how much do apps need to build on top of that basic location data. When we spoke with Chi-Hua, he said that a good app must at least have a sense of their environment, but that isn’t enough. He seemed to indicate, and we agree, that the obvious apps are not great ways to build companies (e.g. there will be hordes of products competing to show users nearby restaurants, and that is not a full-featured app).

One of Mike Mace’s points about big applications was something like “the killer app is diversity” meaning that few apps will be both customized enough to be interesting and still useful to everyone. Several examples of customized apps he mentioned were specific to a certain profession (e.g. an app which helps a health professional calculate a person’s vital stats in the back of an ambulance). We think a better manifestation of a customized app would be one that lets the user do the customizing, such that the app works differently for different people.

The zintin iPhone app fits the bill on both counts. Zintin leverages proximity to other users as opposed to location, but goes further to let you interact with these people. Users can broadcast media (i.e. picture) profiles to the people around them, as well as view and add to other people’s profiles. Because the content is user generated, the app will be different things to different people. For example, we have discussed helping bands promote themselves through broadcasting media. When the beta launches (sign-up here) the app will focus on media sharing, but as we get more feedback from our users, and continue to finish current projects, we hope to make new types of interactions available, so be ready to update zintin to get new features.

We are excited to see what other developers have been cooking up, and we are very excited to share what we have been working on. If you have an iPhone, make sure you sign up for the beta of our iPhone app.

The iPhone has defied the common power structure that puts carriers on top, brought in $2 billion in extra cash for ATT, offered the first real web experience on a phone, and finally showed us all what a phone can do. Despite all this, it is not at the top of the list for smartphone sales, and there are signs that it has had little success outside of traditional early adopters and mac fans (more about this in an upcoming post).

We recently spoke with Chi-Hua Chien, a partner at KPCB (Kleiner Perkins Caufield and Byers), managing the iFund (a $100 million venture fund for businesses making iPhone apps) and we would like to share his thoughts, and ours, about the future of the iPhone.

We agree that the iPhone has sold well (zintin will be out on the iPhone this summer and it will be a couple of months at least before we appear on other phones). But we think that what is really unique right now is the set of market conditions that created the iPhone. Technology has been advancing at a steady pace, but in the US, most major wireless carriers have stifled innovation through closed business practices. After so many years, we have reached a tipping point; users want cool and useful phones like the iPhone so badly that the carriers stand to make more money by finally giving users what they want than by keeping users locked in to contracts with cheap phones. These market conditions don’t only affect Apple products of course; they have inspired Google to work on an open source mobile OS (Android), and inspired Microsoft and RIM to produce real web browsers for their phones. Many other companies are or will be following suit.

So while the iPhone is certainly the start of an avalanche, its not clear yet that the competition will let it run away with the market. Apple may sell 100 million units (if you include the iPod Touch), but what will be more interesting is how much they sell compared to everyone else (Android phones, Windows mobile phones, Blackberry, etc.)